Remortgaging

Not so long ago, most housebuyers took out a mortgage when they bought their house and dutifully paid a bit off each month until the capital was paid off. Now, however, the ultra-competitive mortgage market means that it often pays to shop around even when you already have a mortgage and have no intention of moving house. Many homeowners also use remortgaging as a way of cash in on the equity growth of their flats and houses by increasing the amount that they borrow.

The legal process of remortgaging is relatively straightforward and simply involves transferring interest in the title of the property from one lender to another. Some lenders even throw in the legal side for free. Otherwise, valuation fees will be in the region of £200-£300 with legal fees of around £250-£300 and there may also be an arrangement fee levied by the new mortgage lender.

However, before remortgaging, you should check your existing mortgage's terms and conditions. Some mortgages, particularly those with discounted, capped or fixed rates of interest, carry redemption penalties which can add up to thousands of pounds while most will have some form of administration fee to pay if you switch out. You will have to do some very careful sums to see if the benefits of a new mortgage outweigh the costs of leaving your old one.